Software Development Is A Scarce Good

from the development-costs... dept

Whenever we talk about business models and understanding the difference between infinite and scarce goods, someone almost always complains that things like music or software aren't infinite goods, because they "take resources to develop." But, of course, we've pointed out that's exactly the point. The development is a scarce good, and you can come up with plenty of business models to get paid for creating content. But getting paid to create content is different than getting paid over and over again for copies of that content. This seems a little tricky for some to understand, but: creating new content is a scarce good -- that content, once created, becomes an infinite good.

So, if you're looking at business models, there are plenty that recognize this and help get people paid for the creation of content, rather than for trying to distribute copies of that content. We've talked, for example, about programs like Jill Sobule's and Marillion's, where they basically get fans to agree to fund the creation of new albums, with additional benefits offered to those who do so. Now, Chris Gruel points us to an example where a community bands together to put up a bounty to get a certain software application developed, with the first person who does receiving the bounty. In many ways, this is similar to our own business model with the Insight Community, where we pay people to develop insightful content. It's great to see more examples of this business model in practice.

Once Published

There are two ways any craftsman can sell their work. They accept a commission to produce work, or they sell the work they've already produced.

This concept of scarce vs infinite is an over-simplification.

All we're seeing the Internet do is reveal that copyright is an unnatural privilege and an ineffective anachronism.

The Internet cannot do the impossible. It simply permits people to assert their liberty to share and build upon published work. It doesn't make all acts of creation instantaneously available to all people.

If you want the software I've created you can jolly well pay for it. You can't wave a wand and say that because it's digital it is an infinite good from the moment I created it, and therefore you don't have to pay for it - or that I'm a fool for wanting to be paid for my work (instead of getting paid for a related activity).

Cost of Development

In way too many cases you will need to sell the "infinite" goods numerous times to recover the cost of the "scarce goods"

Companies like Microsoft invest millions of dollars into the development of a single application. The absolute ONLY way to recover those costs is to sell the product to numerous people and spread that cost out over all of this sales.

It's nothing but BULLSHIT to continue to harp on "infinite goods should not cost."

Maybe if you got off your lazy asses and developed something that you put thousands of hours and millions of dollars into you would understand. But instead you sit here crying that we with the brainpower are somehow damaging "society" by wanting to protect our work and our investments.

Software is not an art

Software is engineered product. It's not an art like song/movie/painting.
People don't develop software "just because", they do it because they get paid. Sourceforge-like projects are not representative samples - it's just hobby projects that sometimes have development suspended for years.

There's another key point that Mike usually miss when he talk about software. I guess that's because he never programed anything more complicated that his microwave oven. The key point is that wast majority of software is boring like hell. Nobody would develop it "for fun". Financial software, medical, machinery control, and the list goes on.

So yes, is kind-of-infinite resource, once developed. But copying it is very close to stealing. Sometimes indistinguishably close. So close, that in many languages there's simply no term equivalent to "infringement".

All "boring" kind of software doesn't have "promotional" value associated with it, so unauthorized copying is stealing from ethical point of view. When you upload song to P2P, you promote an artist. But when you upload point-of-sale software you take money that should be going into pocket of developers.

"You can't wave a wand and say that because it's digital it is an infinite good from the moment I created it, and therefore you don't have to pay for it"

No wand needed, it IS by nature an infinite good. You might not like it, you might think that it is immoral for people to replicate and use it without compensating you, but that doesn't change the fact that people are able to do that. Information is by nature something that can be propagated and replicated infinitely.

Re:

Well, that's plain BS. Unless by "infinite good" you mean "easy to steal".
Remember that software is not a song, which is complement to physical product (concert). Software IS final product.

Sometime it's free (as a beer), usually when bound to physical product (hardware).
But, in such cases many will scream bloody murder about "locked hardware", which is even bigger BS. ALL hardware is locked, beginning with engine in your car and going to your shiny iPhone.

Re:

"No wand needed, it IS by my nature my infinite good. You might not like it and it is immoral for people to steal and use it without compensating you, but that doesn't change the fact that people are able to steal it. Anything I decide, is by nature something that can be propagated and stolen infinitely, by me. Because I am entitled to it."

Re: Software is not an art

Oh please, I'm a software developer and an artist, and if I hear that one more time I think I'm going to buy a gun and start shooting. I am so sick of people that consider "art" a loftier creation than any other. I've got news for you, it's not. Not in the slightest.

For every master there's a million hacks that think they can paint or sculpt. For every masterwork there's a billion trashy drawings or paintings that someone or their parents think is saleable art. For every top singer, writer, song and poem the same can be said. Finally, the same can be said for software developers and the software they create. Most developers suck and most of their software is just boring everyday coding, but there are masters out there who create new ideas, new paradigms, and that churn out beautiful code the way most of us turn out whitespace.

Re: Software is not an art

Yawn, surely you are familiar with a variety of the Linux business models. Ubuntu, for instance, sells support (scarce) but gives away the software (inifinite). And people love to contribute to it, because they have built a community of people who want to help.

So people working for Ubuntu do get paid. Their revenue does not come from distribution, but from scarce goods. Ironically, the more people who use Ubuntu, the more valuable the business model becomes.

Do you see the difference? Your model is based on blocking people from the software to preserve sales of that software. Their model is creating a profit stream from giving software away.

By the way, I'm curious about the piracy problem with the boring as hell software that no one creates for fun? I haven't seen a lot of machinery control stuff on TPB, but I haven't looked. Has that stuff actually been pirated?

Re: Re:

by infinite good we mean a good that can be distributed without costs for a singlle copy or the original being lost. if you have software and I copy that from your hard drive we both have it. in other words there is no limit on the possible amount of copies.

also about the misconception that it has to be free is wrong, you can try to sell it ofcourse, but since it's an infinite good there is a good chance that competitors will eventually create the same good but with a buisness model that drives the good to free wich is a strong competition agaainst any pai software in my eyes.

Re:

The fact that something could be replicated infinitely doesn't mean that it is replicated infinitely from the moment of creation.

The missing step between me creating it and you replicating it infinitely (if that's how you like to spend your time), is me letting you have it - probably in exchange for whatever money I think it's worth (or no deal).

Remember, the principle at work is not free as in beer, but free as in speech.

If you want my software you're going to have to pay for it. There's no free beer for immoral IP thieves in my cellar.

Re: Software is not an art

I get what you are saying, but I disagree with the "Software is not an art" argument- I develop software, and I do it because I love to do it. Part of what I do I get paid for, but the majority I do as a way to release, and the end product of my release is a piece of software that, perhaps, generates a tone based on a simulation of a set of verlets. Or, a landscape generated at runtime. Even when I am working on my paid products, I put my soul into it.

I'm not disagreeing with your point as a whole, but I thought i'd pipe up that software development can be an artform. You could argue that it's the output that is the art, but the output is just something that a bunch of logic put together, but the "artist" in this case pieced together the code that generated it- IMO that makes the code the piece of art, and the visible output just a byproduct.

Oh just along the way, I'll totally agree with you about financial software being no fun. Makes me shudder just thinking about it! (speaking of which, I've got to get back to work on something very similar to that right now!)

Re: Re: Re:

Re: Re:

"If you want my software you're going to have to pay for it" - absolutely.
I hate to see BSA misguided "anti-piracy" efforts, but justifying stealing is disgrace. Software engineer is not an artist which work because of "inspiration". Engineers work because they get paid. Some of them like the work itself, some don't. And it's doesn't matter for a bottom line.

Re: Re:

ah, the great fallacy - "I can/should set the price for what I made, because this is it's value to me" does not sync with "this is the value for it that my users decide".

All we need is the name of your software to watch it get cracked and shared within minutes.
And do you really think people couldn't find fraudulent credit cards, etc? Have you never heard of one person buying something legitimately in order to crack it for the rest? This is far from a new idea.

Re: Cost of Development

The absolute ONLY way to recover those costs is to sell the product to numerous people and spread that cost out over all of this sales.

Evidence? You continue to repeat this point in your various comments, but you neglect to actually back it up with any proof or logic.

Maybe if you got off your lazy asses and developed something that you put thousands of hours and millions of dollars into you would understand. But instead you sit here crying that we with the brainpower are somehow damaging "society" by wanting to protect our work and our investments.

And here's the typical 'anyone who doesn't agree with me is lazy' rant. You're not addressing any of the points raised in the article with any compelling reasoning or evidence. What's being pointed out to you, repeatedly, is that your absolutist point of view is flawed, and ignores perfectly valid business models.

It's not like they don't want to give money away. It's just not like they want to give away money for something they self can easily recreate.

Think about what people want except the software itself. They want it developed!
Give them support contracts, give them a virtual server, give them back-ups, give them bug fixing, give them development, make them work together to get their things paid. Yes I see a lot of free infinite goods, but I barely see anyone making money out of it.
While they so easily could...

And @Thom: I have to agree software is Art, for every good you have a thousand bad. =) And to the contrast what some believe some people actually enjoy coding and loose themselves in it. =)

Re: Re: Re: Re:

A piece of software that accepts a handful of fields and populates a database for later use can easily just work and not require education and training. A more complex piece of software, like an operating system or Photoshop for instance, requires education and training for most. For the more adept that may be a book introducing all the features that would otherwise take months or years to discover and explore. For the less adept that may be classes or seminars. There's an huge industry devoted to education and training and it covers everything from the simplest to the most complex software.

Go ahead Yosi, tell me you've never read a book on any piece of software. If you do, I'll tell you that you're a liar, a troll, or computer illiterate.

Re: Re: Re:

I've been writing software since 1988. Almost half of that time I've done it for my own personal satisfaction and wasn't compensated for it in any other way. Much of the rest I take great personal satisfaction in.

Do you think every person making what you call art is sitting around in glee all day just because they can create their art? I've got news for you, they're the same cross section of humanity as the engineers, they've just chosen a different profession. Some are in it for love, some for money, some just because it's the one thing they're good at.

So sad

Wow, this thread brought out the ignorant programmers of the bunch. Makes me sad to see them speaking from such easily debunked views. Makes the rest of us look a little bit worse. I program too. I however, get paid to program. There are other programs I make though, at home, that I do not get paid to do. And I do give them away. They are fun to make. It is one of the paths used to expand my knowledge to keep me usable by the market.
The idea of HAVING to get paid for a program already created seems to be spoken from the unimaginative point of view. It is infinitely available. If copied, you still have it. So it obviously isn't stolen. You may consider it infringed, and I would laugh at you. Imaginary Property really does seem to fit. The internet is here. If your software is worth having, and you insist on charging more than people are willing to pay, it will be pirated. Deal with it. And stop whining about it. If you want more people to buy, lower the price. Price is not the same thing as value. You can place any price you want on it, and each person will still place their own individual value on it. That is why not every person who could use it will buy it. They do not value it as much as the price you put on it.

To the idea that some software isn't created for fun like software used in the medical field. No, not all software is created for fun, some is created because it is needed. Somebody needed or wanted it. Every piece of software has a purpose. Be it for fun, for education, because it was needed, etc. And yes, some may get the job done better than others. But, you really need to get off your high horse. You are not that important as that everybody absolutely must pay you for anything you created. Nobody is that important. Just deal with it.

Re: Re: Re: Re:

Just an observation...

I have worked closely with artists and inventors alike for many more years than I care to count. Eventually I came to realize that the only true distinction between most artists and inventors is that they work with different "tools". Otherwise, they each engage in quite similar creative processes.

I'm a software developer. I get paid pretty well to spend forty+ hours a week developing custom software for single customer.

Know what I do when I go home? Spend even more time writing, designing and discussing software (specifically, the reference interpreter for the Python programming language: http://www.python.org) on a purely voluntary basis.

I get a hell of a lot out of it:
- education (there are some *very* smart people involved in CPython's development and I get to learn from them)
- personal satisfaction (Python gets used in lots of places, and I get to feel that I have contributed in some way to each of those uses)
- entertainment (involved discussions about a complex topic of shared interest? sign me up...)
- professional development (potential employers pretty much have to take my word for it when I describe what I have done for previous employers - but my contributions to Python are a matter of public record)

Practical software development has too many functional constraints to be a pure artform - if the computer doesn't understand it, it isn't going to work, and if it doesn't help the end user achieve the task then the software has failed in its purpose. But the intellectual challenge and stimulation in reducing a complex problem to terms so simple that even a computer can understand them? That's something many good software developers will happily tackle for free.

The point Yosi misses is that most software (aside from games) is *functional*. It has *zero* value in and of itself. Software is valuable only in what it allows *people* to do (or to do more efficiently). In the case of Python, it allows other software developers to program more efficiently - hence, it is natural for developers to be interested in it for their own reasons. While some other CPython developers are like me and contribute solely on their own time, others are consultants that use it for paying clients and hence contribute to improving their own toolset, while still more are employed by companies that use Python and the company receives value by improving the shared (infinite) resource by contributing a bit of their own employees' time.

A similar situation applies for a lot of other commodity software like operating systems, office applications, and Internet infrastructure (including web browsers) - various individuals and organisations using the distributed infrastructure of the 'net to collaborate in a fashion where the whole (received in toto by participants and non-participants alike) vastly exceeds what any one participant would be capable of on their own. (And not only are such businesses almost entirely free of the need to be concerned about software license audits, in many cases, even after accounting for the cost of contributing something back, the overall cost will still be less than the rent-seeking of some commercial software vendors).

The "boring" software that Yosi talks about is almost all customised one-off business rules stuff. Even if a competitor *did* copy the underlying utility applications, nearly all of that software is so flexible that configuring it to handle a *specific* situation is a programming task in and of itself (hence the widespread use of consultants in those fields). In other words, the value isn't completely tied up in the product: a lot of it is in the expertise needed to take that product and apply it to real world problems.

Useful software will be developed even if nobody is getting paid for copies of it later - it gets created because people want it for what it lets them *do*. Whether the actual creation is done collaboratively by self-motivated companies and individuals or on commission from end users or speculatively by a vendor hoping to be able to sell it to users later is largely irrelevant - one way or another it *will* get created eventually.

Now, a different aspect, where software development definitely *is* art is game development: games don't have the same functional constraints that practical software does, so they have many more characteristics in common with other artistics endeavours (especially movies). However, in that area, many game developers are proving far more adaptable than the older copyright industries. Platforms like Steam, or software-as-a-service approaches like World of Warcraft are all designed so that end users either get a big gain in convenience from paying reasonable prices, or else they gain access to additional elements by being legit (such as online play or free updates). In pure online games like WoW, Blizzard actually give away the client for free - it's essentially useless without an account on their servers, and that you pay for (although still far, far less than it would cost to go to the movies regularly).

Note also that software doesn't have any of that nonsense about royalties: software developers are paid for the time they spend developing the product. Whether their employer then goes on to sell a single copy of that software, no copies or millions of copies doesn't much matter - the original developers typically won't get a cut (and, IMO, that is as it should be - books/music/movies are the aberration here, not the norm).

@Thom: these days you can go a long way just reading stuff on the internet. That doesn't invalidate your point, but it does mean it could technically be legitimate for someone to answer your question about reading books in the negative :)

Re: Re:

The missing step ... is me letting you have it

This is exactly what Mike's pointing out. Your creation of the new software is scarce. If they aren't going to pay you for it, you shouldn't create it, right? But once it's created and distributed, then it's infinite and can be copied without limit. And trying to set an artificial limit will just hamper you relative to your inevitable competition.

Free eh?

I think the whole "infinite goods should be free" thing is complete BS. By that logic you can take a DVD convert it to an AVI file and distribute it freely... give that a shot and see how long it lasts. Or how about buying and downloading Visual Studio 2008 or one of the Adobe Creative Suites and passing those around. People that support that are the reason that things like Activation Keys, Limited Installs, and DRM (Digital Rights Management) came into being. Call it what you like, but what it really is, is theft.

If there is one thing I have learned, customers don't actually pay for software. They pay for support and updates. Yes, it often gets priced on acquisition, but that's just because most customer's accountants like to have an asset they can track or assess software.

No the real cost of software is what you pay for ongoing maintenance and support.

Logical conclusion

Taking this argument to its logical conclusion, the first person to install Windows 7 should pay hundreds of millions of dollars and everyone else should get it for free. Of course that's nonsense: for most software the only way to recoup the high fixed initial cost is to spread it incrementally over all the users.

Re: Re: Re:

Agreed, it just so happens that there is a business model where the cost of creation is recovered by selling a zillion copies at a fraction of the cost it took to create it. The business model, is actually taking advantage of the "infinite" concept to reduce the cost of of the product "per user"

Why don't you whiners figure out how to get paid BEFORE you create something that is infinitely replicable, instead of hoping that people will be "honest" enough to pay you after the fact, at which point "morality" is the only reason to pay?

Re: Re: Cost of Development

...your absolutist point of view...

Can not the very same thing be said of this site's "business model" mantra?

I do not plan on holding my breath until the day I read in a newspaper or on the internet an ad soliciting interested parties to fund the development of a software application such as AutoCad, Photoshop, Maya, etc., etc. I can only begin to imagine the "fun" that would ensue when 30, 40, 50 or more parties sign up as "white knights", and then collectively sit down at a conference table with the software developer to sketch out an application that meets each of their respective needs. Product design, development and deployment by "committee" much more often than not ensures that a product is not designed, not developed, and not deployed. If by some miracle a useful product actually emerges in such an environment, I daresay that the time lag will generally prove unacceptable.

If, as you say, this is all about business models, then why not saunter over to Adobe and other similar developers and present a workable model to their executives demonstrating how then can make more money based upon the "infinite/scarce" distinction? I am not at all sanguine you would receive a warm reception.

Re: Once Published

No need to wave a magic wand. A digital good is, by definition, infinite. You can WANT people to pay for it, and you can WANT it to be scarce. But guess what? It can be reproduced infinitely for a cost approaching zero, and there is nothing you can do to change that. It IS infinite. The only way you can stop it from proliferating is by never releasing it to anyone at all.

Your post sounds like the logic of politicians. "This is the way I WANT it, this is the way it SHOULD be, therefore, that's the way it IS." Mike is not commenting on how things should be. He is commenting on reality. Like it or not, this is the way things are. You can choose to charge for each copy of your software. You can also choose to fail.

"infinite supply" is just nice speak for "stuff we stole online". If a programmer writes a new piece of software and licenses and sells online 5 copies, is it scarce or infinite? By definition, another copy could be made for nothing. But part of the value paid by the 5 license holders is that it is in fact scarce.

What Jill Sobule and Marillion are doing is really removing their risk from development, nothing more. They are no longer willing to risk their own money to make a record, no record label is willing to front them the money under terms they want to deal with, so they are asking the end users to become the risk buyers of an undeveloped product. It isn't a new business model, but it is entirely the proof that producing music isn't done for free as some might suggest here.

Once again, a massive stretch of logic to try to push the theory of "FREE!".

Re: Stupidity

The smart ones have already. That's what things like activation keys and DRM are for. Its also what those little contracts are for that you sign before you install the programs. This is the first time I've seen the pirates come out of the back alleys of the internet and try to present a business model of piracy though.

I realize you people are going on about software, but lets take your lunacy to the next level. What about money? What you have on a credit card is just a number, so that's digital. The card in your pocket is just a plastic printout, like the DVD the software is put on. Does your logic then mean, that just because your money is digital, that everyone is entitled to it?

Re: Software is not an art

Maybe you should read the article. He's not saying you should make money from promotions. He says you can make money by selling the creation of the software. That is, get paid in one large lump sum upon creation. It would not work for all projects, but neither does the current model.

Re:

This time I wholeheartedly agree with you. Programmers must be paid. In advance, since programmer doesn't care whether software will sell or not. He/she have to bring paycheck every month.

"If there is one thing I have learned, customers don't actually pay for software. They pay for support and updates."
Well that's complete crap. I want software that don't need support. I want it work. And updates which are bugfixes should come for free same way as warranty for faulty product.

Re: Logical conclusion

I think people get two terms mixed up: cost and value.

Say you make a program that costs $5M to develop. You figure you could sell it to 1M people so you print off 1M copies. You charge $10 so you expect to make a profit of $5M. You start selling and then another similar product comes along that is $2. Now people stop buying your software. Here is the difference. The COST of each copy of your software is $5 ($5M/1M). But the VALUE of your software is only around $2.

Re: Software is not an art

Wow, I'm glad you took the time to include every software developer out there in this incorrect assumption.

But alas, it is now my duty to dispel all your points.

Software is engineered product. It's not an art like song/movie/painting.
I'll keep this in mind the next time I build a web page, which must stand alone in design against all the others out there. I'm sorry, but you're wrong on this. Even computer based software has designs implemented by the programmer which also makes it unique to separate it from the competition.

People don't develop software "just because", they do it because they get paid.
Again, you're wrong. I did this (and still do, limited). I used my "just because" software I wrote to sell my skills. It worked well.

There are a ton of people who design open source software without receiving a penny for their work.

Sir, your notion is completely wrong on this one.

Financial software, medical, machinery control, and the list goes on.
What you fail to realize with this list is 95% of all programmers started out with "fun". They took it upon themselves to learn the trade because it *is* fun for them to program, regardless what the application does.

The *fun* is lost when programmers have to deal with people who have no damn clue on what they want, forcing the programmer to recode and recode and.... you get the idea.

When you upload song to P2P, you promote an artist. But when you upload point-of-sale software you take money that should be going into pocket of developers.
Bzzz. Wrong again. What you're thinking is that the product should pay for the development, but you're mistaken on this.

It's your SKILL people pay for, not the product. If you're a software developer who believes it's the product people are paying for, you're in the wrong business to make money.

Because, just like music, people will opt for free (or lower cost) to bypass the cost of your software which should be $0.00.

Back in the day, Winsite was my advertising platform which landed me many a consultant programming job, because it was my SKILL they paid for.

Never, ever the software. That's always given away at no cost (made up for by the price you charged for your skill).

**********

On topic now, what people don't understand is how a business works, apparently. To start a business, any business, you need capital.

People who read here often assume the work comes first, and money is to be made selling the software (music, etc.).

It's sad, really. Any business book regarding self employment states one very cold hard truth: always pay yourself.

This is critical to understand, because how can you pay yourself without business capital? If you do this, then you are working for $0.00 and hope to sell your software.

It's a very bad business decision and you'll be out of business as your competition undercuts your price to $0.00.

Re: Software is not an art

"People don't develop software "just because", they do it because they get paid. Sourceforge-like projects are not representative samples - it's just hobby projects that sometimes have development suspended for years."

You're right. The Ubuntu desktop, with Firefox and OpenOffice, which I am running right now, does not exist. Nobody would develop a fully functioning operating system (with updates released very frequently), a fully functioning web browser (again, updated frequently), and a full-fledged office suite (kind of a boring thing to develop, no?), without being paid.

Re:

Re: Cost of Development

I agree with you that people who want to use Windows, play high end video games, run engineering software, and many many other pieces of software SHOULD pay for that use. However if you are trying to do that you MUST recognize that anyone who buys it can copy it distribute it. If your software is popular enough someone WILL hack it to render any copy protection worthless.

So listen up to what I have to say

I'm an engineer and my company uses Pro E as our CAD provider. We pay through the nose for every license we have. ADDITIONALLY we've payed Pro E large sums of money to further develop the software to do what we needed. Not a single person here considers "pirating" Pro E here at work because the costs associated with getting caught are astronomical. However I have copies of several incredibly expensive software packages at home for me to use on small not for profit personal projects that I did not pay for.

My point here is that companies will purchase software at the market price becuase they must in order to do business. People pirate software because they cannot afford the liceses or do not believe it is worth the price. Use at home can drive use at work which gives more money to the software owners. Therefore catch companies who pirate, let individuals go.

Think Apple or 37signals

For all the people that say that software can be free and make money from support. It can! There is no business in which I can think of that has one business model to rule them all. Each piece of software can be made to do the same thing and charge different things. Both can still live... it's called competition.

For instance.... Ubuntuu is free and is supported financially by support contracts. Apple's OS X is paid for (either you pay for it when you buy a mac or you buy it off the shelf) upfront, yet many people buy it. Apple's software is so simple to use that that is what you pay for. The fact that they went through the work to make your everyday life simple.

I think the problem with this discussion is two fold. First everyone thinks that there is only one way. Second most of us in the discussion are all programmers or geeks in one way or another. We DO NOT represent the average user.

Re:

You wrong at generalization of a problem.

"Useful software will be developed even if nobody is getting paid for copies of it later - it gets created because people want it for what it lets them *do*"

This only true for "cool" types of software. Python is example of this. What do you think, how CAD software gets developed? I'll tell you how. Synopsys, Cadence and few others charge millions (yes, millions) for single license of ASIC development suite. There no open-source alternative, despite usefulness of such software. I never met or heard of programmer who want to write static-timing-check program @ home. What for? You can't produce ASIC's as a hobby, so such software remains in domain of 1M/license world.

Not so fast, Harold, You're showing your ignorance once again.

"infinite supply" is just nice speak for "stuff we stole online".
Such moronic thinking. For someone who lives and breathes the advertising model, I'm absolutely stunned you can't make the comparison between the two.

But of course, as with so many like you, you're all about blaming downloaders rather than understand how business truly works. Read below for more detailed education, because you and Yosi need it. Seriously need it.

If a programmer writes a new piece of software and licenses and sells online 5 copies, is it scarce or infinite?
Scarce, of course, because the programmer set the terms of the scarcity. But if the application gets copied, do you think the programmer will care?

Of course not, because the programmer had a reason for making it scarce, and it's logical to assume they did so because the cost of development and a little profit was obtained by the 5 copies sold.

But what you, and many other ignorant readers, don't get is that there is a FINITE POINT in which software no longer retains its ability to recoup development costs.

This is why a developer should never, ever rely on sales of software for revenue, but instead, rely on charging for the skill of developing the software.

Every musician you hear started out with the "free" model, whether you accept it or not. DISTRIBUTORS get thousands upon thousands of demo songs every year and they opt to license the song.

So how much did that artist pay themselves to write, produce the demo, and perform the work? If there are other band members, who paid them?

I can't fathom why you people are so ignorant as to understand this basic premise.

"Programmers must be paid.", says Yosi. But Yosi, who paid you to program?

Did you write the software yourself without a client? Imbecile! You broke the first rule of self-employment business: always pay yourself.

No, what you did is what every other ignorant person who replies about "free" vs. "stealing" is to make the incorrect assumption that these artists/programmers worked for something when, in truth, they worked for free.

Until they understand this, their arguments are baseless rants about lost revenue when none was to be had in the first place.

How To Sell Software Development.

Big companies tend to have complex internal organizations, and they tend to produce complex products. This means that they have special needs as customers. Such big companies do not have to pay by the copy-- they can pay a lump sum for agreed performance specifications. Small companies are not so interesting, because they tend to have relatively simple organizations, and make relatively simple things.

Microsoft had a paradoxical relationship with its own office software. Computer manuals are about the most complex books there are, from a typographic/production standpoint, and Microsoft was therefore its own best customer for word processors. Open source is now benefiting from the same dynamic. The people who push HTML editors and suchlike along the furthest will be those attempting to create context-sensitive help for other software.

Let's see how we could apply that to other kinds of software.

Take CAD/CAM. The most demanding CAD/CAM customers are aerospace companies such as Boeing, or alternatively, the United States Air Force, and the United States Navy. The Air Force has an enormous vicarious investment in aircraft manufacturing, and a vested interest in making sure that good tools are available. With a bit of luck, you can find a colonel who is highly receptive to the idea of open-source in principle. You can sell him on the idea that it is always a good idea to have a backstop in case Autodesk messes up, and goes for its own equivalent of Windows Vista, and that the mere fact of there being an open-source project in existence will compel Autodesk to try harder. There is an Open Source CAD/CAM program called Xfig, which seems to be "viable, but stalled," with no new version since the spring of 2007.

One of the developers (the current maintainer) works for Uncle Sam at Lawrence Berkeley Laboratory. His research interests mostly seem to run to small scale projects, such as home energy efficiency, and that may explain why XFig is not presently being developed to "big-league" standards. Xfig would seem to be a good candidate for being restarted on the Air Force's dime, and given the same kind of progressive improvements which Mozilla has received. The means of restarting it would not be too complicated, given funding. Find an academic sponsor, for starters, who is willing to actively engage the aerospace industry. Pay a stipend to support a graduate student to manage the project. Put up some summer grants, on the Model of Google Summer of Code. Find a college that wants a free computer lab for Mechanical Engineering coursework, and is willing to be a testbed for Xfig development work, especially things like integration with numerically controlled machine tools. A short-term project might be to design and build a small custom automobile as a senior class project. A million dollars a year would go a long way to funding this kind of thing.

The sort of person who buys one copy of AutoCad at list price is likely to be an architect who designs small commercial buildings, such as mini-malls and fast-food franchises. Something like a Boeing 777 is just totally out of his league from a technical standpoint. The architect is like someone who only uses a word processor to write letters.

Re: Not so fast, Harold, You're showing your ignorance once again.

""Programmers must be paid.", says Yosi. But Yosi, who paid you to program?"

What a moronic question. A company that employs me, of cause. Other questions?

"You broke the first rule of self-employment business". Never been in self-employed business so I don't care what kind of rules are there. I prefer to work for enterprise. Do you have a problem with that?!~

Re: Re:

Then you are out of touch with software and out of touch with reality.

"I want software that don't need support."

I have a great "Hello Earth" program that needs no support. The C++ it's built on and the OS it's running on may.

"And updates which are bugfixes should come for free same way as warranty for faulty product."

updates aren't always about bug fixes. A lot of the times they are about adding features and enhancing compatibility with new hardware/software, possibly what you would call a bug but isn't.

It doesn't matter how well a program is developed or how good you're programmers are, if your program fills a need it will need support and updates. You cannot please everyone all of the time. And from the way you type you sound like one of those people you can't please any time.

Re:

There always seems to be a disconnect between facts and 'rights' for people that argue about infinite supply.
It is a stone cold indisputable FACT that software is an infinite good. It can and will be copied and shared for nearly zero cost without the original being destroyed or removed from it's owner. This is not an opinion, or a philosophy, or a plank in someone's political platform. It is the definition of a fact... Whether you think that is the way things should be or not makes no difference to the FACT.

I'm not a religious person, but the only clear way I can think of to explain this to you guys that consistently miss this very major point is this:

The flood is coming. You cannot stop it. You can argue all day long whether the flood is real or not, whether you deserve to be wiped out or not, or whether the government should try to build a dam to slow it down, whatever... But the flood is still coming. The smart people will accept this, whether they agree with the reasons behind it or not, and build a boat. The people who are squabbling about how they deserve to survive because they built mansions and bridges a few years ago will drown. The people who barricade themselves inside their marble offices and add more complex locks to the doors will drown.

Jill Sobule's 'boat' is doing things the way she has before, but instead of having a record label pay her an advance to create an album, then take most (almost all) of the profit for distribution - she is taking an advance from the fans, then letting the 'flood' handle distribution at no cost. She wisely sees that this will be a net gain for her, as she now has more and more dedicated fans who don't feel like they are being treated as criminals, and will gladly pay for merch or a concert ticket. She also has a core audience of super-fans who have actually contributed to the creation of the work and value it highly, instead of some stuffed shirt who has likely never even heard her record counting their money and shoving her into the recording booth to generate more.

Re: Re: T-Shirts, retards !!!

R Miles, when you consider yourself a programmer for making a web page, I sort of get where you are sitting at. Your paper tape to database software is for your own use, there isn't demand for it so you better be working for free, no sane company is going to pay you to do it unless they have precious data on paper tape (unlikely).

"infinite supply" is just nice speak for "stuff we stole online". That is clear and true, a coded way of being allowed to commit virtual shoplifting supported by ads (which don't go to pay the creator). it is also an ignorant term because it focuses narrowly on the distribution of something, and not it's full life cycle from creation to distribution to use. The end resulting CD, DVD, or software package isn't disconnected somehow from the process that made it, except by the people who want to remove it's commercial value and replace that with an eyeball attracting value.

How many P2P sites or music sharing sites would exist if the owners had to pay to produce all the content they share? Would you pay $100 million for a hollywood movie to give away, or $100,000 so that a record could be made so you can give it away for free? Nope, it would be bad buisness. But stealing it from someone else and running it as part of a ad supported file sharing site? Apparently "FREE!" is great.

Easily Amused: You can attempt to re-write what Jill Sobule is doing anyway you like, but it to me is the clearest indication that the record industry can no longer afford to support marginal artists. Jill Sobule isn't the beneficiary of a great new system, but rather a victim, IMHO. Her last two record labels went out of business, and nobody is stepping up to finance the next record. While she may be lucky and have dedicated fans to help her out (not clear, they are still begging for money on the site) can you imagine where this puts a band or artist without a major following? Can you say "work for FREE!"?

"The people who barricade themselves inside their marble offices and add more complex locks to the doors will drown"

The reality is that the artists, producers, song writers, and all those other people are sitting below deck, just like the titanic, and they all will drown long before the guys on the top go broke. Floods are indiscriminate, and they will kill off as many artists are they do middleman flakes.

Re: Re: Re: Re: T-Shirts, retards !!!

Re: Cost of Development

It's nothing but BULLSHIT to continue to harp on "infinite goods should not cost."

Strawman alert. Why do you keep falsely insisting I say "should". I am not. SHOULD is a moral value. I'm talking about the clear market price that *will* be established in the market. It has nothing to do with "should".

Maybe if you got off your lazy asses and developed something that you put thousands of hours and millions of dollars into you would understand. But instead you sit here crying that we with the brainpower are somehow damaging "society" by wanting to protect our work and our investments.

Please. Do not insult our development team who has put in thousands of hours into building out our platforms and technology.

Luckily, we built them with a business model in mind that doesn't require "protectionism."

Re: Software is not an art

There's another key point that Mike usually miss when he talk about software. I guess that's because he never programed anything more complicated that his microwave oven. The key point is that wast majority of software is boring like hell. Nobody would develop it "for fun". Financial software, medical, machinery control, and the list goes on.

Um. Whoever said anything about programming apps for fun? We never did. What we said was you can put in business models where you can make more money. How is that telling people to program for fun?

All "boring" kind of software doesn't have "promotional" value associated with it, so unauthorized copying is stealing from ethical point of view.

Wait... what? Yes, every piece of software has promotional value associated with it. Just because you don't think so (or are apparently not creative enough to figure out how) doesn't make it so. Name me a piece of software, and I'll tell you what it promotes.

Re: Re: Re: Cost of Development

If, as you say, this is all about business models, then why not saunter over to Adobe and other similar developers and present a workable model to their executives demonstrating how then can make more money based upon the "infinite/scarce" distinction? I am not at all sanguine you would receive a warm reception.

Yeah, as if you haven't noticed one near universal truth: those used to doing business the old way have a pretty difficult time recognizing how new models work. In fact, they usually only notice the new models in time to go out of business.

I don't understand this ridiculous assertion people make: that the model is only acceptable when those who have lived off the old inefficiencies decide to switch over. Apparently you've never read anything about creative destruction. It doesn't work that way.

Re: Logical conclusion

Taking this argument to its logical conclusion, the first person to install Windows 7 should pay hundreds of millions of dollars and everyone else should get it for free. Of course that's nonsense: for most software the only way to recoup the high fixed initial cost is to spread it incrementally over all the users.

Re: Re: Stupidity

I realize you people are going on about software, but lets take your lunacy to the next level. What about money? What you have on a credit card is just a number, so that's digital. The card in your pocket is just a plastic printout, like the DVD the software is put on. Does your logic then mean, that just because your money is digital, that everyone is entitled to it?

Uh, no. Software is infinitely available, money supply is a representation of actual value. So it is not in infinite supply.

Re: Re: Cost of Development

Perfectly legitmate "business models."

In every case where you argue that something should be free you reference "business models" based on the theft of free products. All of your claims to fame come back to Linux which is a perfect example of how "free" hurts/slows development.

Because Linux is free it's development is slow and spuratic, and depends on a few geeks that love it enough to invest their time for free. Linux has taken 30+ years to get to the same level Windows got to in half or less of the time.

All these socalled "perfectly legitmate business models" are built around the general theft of someone elses product and giving that product away for free while adding some service too it. AKA Ubunto, Redhat, and all the others.

Without the work of someone else not one of those companies would exist today, and not one of them have the talent or skills that it takes to develop what their business model is built around. The ONLY reason they exist is the generosity of the original developers of Linux.

Your crying because I choose not go give up my software to allow someone else to build a business model around my software. Why should I? What is the incentive to me? If I maintain ownership, and continue developing I have years of lead over my competitors, and sure they may eventually build something like what I have, but I will be years ahead of them.

If I give my product away, then I basically build my competition, and give them the benefit of my years of hard work. Seems foolish if you ask me.

And if I happen to build a product that requires little support, or modifications, then I have effectively given away what could have made a living for me.

This BS arguement that Society is better if there is no IP rights is flawed as well. The very example that is used to prove the point is really an example of the flaw in free. Linux is the common example in the IT world of a successful free product. Yet it took 30+ years to achieve recognition as even a small player in the market. It still falls far behind on many of the advances that windows brings to the market, and is playing constant catchup with new versions of Windows.

Linux is a failure in the market, it's measly 5 or 10% of the market place proves that it's a failure, and all the companies built around supporting it make money because 5 or 10% of a billion is still enough for the bottom feeders. Not one of them will ever rival Microsoft in money or power as long as they do not build a product of their own.

Those of us that can develop do, those that can't publish blogs crying about how they should get our work for free.

Re: Re: Re: Software is not an art

Re: Re: Logical conclusion

Right. That's why Linux isn't free... oh, wait...

Right, I will be waiting a very long time for my current apps to be ported over to Linux.

It is not that I am ignorant of possible business models pertinent to software, but to categorically state proprietary models are "doomed to die" is a bit premature. In the long term? Probably true. In the short term? A pipe dream.

I AM a normal end user

You guys seem to miss the point. I do not pay for most software because it is NOT worth it. None of it is worth any money to me, and I am far from the only person who thinks so. For example no one I know who uses photoshop has paid for it, because it's a rip off. I switched to Ubuntu because I lost my windows cd, and it had free office software, etc. It had nothing to do with MS being evil etc, it's just because I will not pay for software, and I would have to buy windows. For example if I were to build a HTPC because TIVO is too limited, I am going to save myself a few hundred by installing knoppmyth instead of buying windows MCE. If I can save money on hardware I will, but hardware is tangible, paying for it makes more sense than software. I am also far from the only person who will not pay a subscription fee for software. Software is not the same as cable TV or internet access. It is a product, not a service, I would not pay an annual fee for an mp3 player or xbox, therefore I will not pay every year for updates. Again in this aspect I am far from the only one. I will not pay to learn software, because if i can't figure it out on my own, the software is broken and not worth the drive space. It does not matter if the program is not actually broken, if I can't figure it out on my own, it is broken in my mind, and I will never bother trying to learn it. If your product requires support, it is broken in my mind.

Do you want to know who has this attitude? Everyone who has been going to college for the last 6 or so years. The fact of the matter is that the people who pay for things like upgrades for OS X or from XP to Vista/7 tend to be older people than this group. None of these models work, find a way to make money with software free, in EVERY WAY, or people like me will go elsewhere. It is as simple as that.

Re: Re: Re:

Engineering is an art. I'm sad to see that you don't agree. Perhaps you're just not a very good engineer? There is definitely an artistic bent to the best engineers. There is definitely 'inspiration' in a lot of the work they do. Yes, you can plot along, and just do what you were taught to do, but that isn't real innovation, and the best? They innovate, and push their industry forward.

All these socalled "perfectly legitmate business models" are built around the general theft of someone elses product and giving that product away for free while adding some service too it. AKA Ubunto, Redhat, and all the others.

Actually they use somebody else his work, again check the definition of theft, and add value on their own.

Your crying because I choose not go give up my software to allow someone else to build a business model around my software. Why should I? What is the incentive to me?

What about more people using your software, getting more support contracts, and have some of those 'few' geeks help you developing the software even further? Maybe you should think of letting your depend on you skills instead of a lock-in to a infinite good?

Maybe you should try to stay ahead, make use of scarce and infinite goods. Your competition won't sit still either and if they get there you may be to late.

Re: Software is not an art

Infinity and Scarcity aside, I would argue that you have probably never programmed anything more than your own VCR, sir. Open Source projects such as Firefox, Pidgin, Thunderbird, Sunbird, etc are used - and developed - by millions of people. Nobody makes any sort of profit off of any of this and the donations the Mozilla Foundation received for their three main projects (and Seamonkey) don't even cover the costs of bandwidth to their download servers, which is why they use hundreds of mirrors.

Now, if they developed Firefox just because they saw a problem in IE and wanted to fix it, they could have stopped development at 2.0, or even sooner. However, there are some people - myself included - who get a true joy from writing code. Those who contribute to the various Mozilla projects are amongst us. We don't code for the money, the fame, or anything other than the rush of endorphins and adrenaline when we write 500 lines of code and it runs on the first try with no bugs. Besides climbing K2, there is no greater sense of accomplishment than that, and frankly most of us wouldn't survive to base camp anyhow.

I coded 3 web-based games in PHP when I was 12. I had classes and homework and a surprisingly busy life. I even tried Soccer for a few months. I had about 20 games I could play, more than enough to keep me busy, but I spent time I didn't have to code those games. I never sold them, never copyrighted them, and gave the code for 2 of them to friends of mine. They took me months and months to code, often 3 to 4 hours a night. I stayed awake for 6 days trying to fix one error at one point. I pushed myself to both physical and mental limits I probably could not come close to now, at 22. Why? Because at that point, when I got my first sign up to play the game from a random person on the internet, I had never felt a greater sense of accomplishment in my life.

So yes, often people do code things, great things, and yes, it is often for nothing more than the "fun of it." I don't know who you are and I don't want to, but all talk of scare or infinite goods aside, do not bash the true coders out there. I don't mean the ones in Redmond or Mountain View. I mean the people sitting at home with a DOS 5.5 Manual and a DOS 3.2 laptop at the age of 4 writing a batch script to cheat on Math Rabbit. I mean me. Don't sit here and claim to be some kind of expert on why people write code when you clearly can't program your own VCR without being paid $100 per hour to do so. Some people enjoy writing code. Some people enjoy playing guitar, or playing guitar hero, or playing soccer. To each his own, but do not put others down based upon what you choose.

Re: Re: Re: Cost of Development

In every case where you argue that something should be free you reference "business models" based on the theft of free products. All of your claims to fame come back to Linux which is a perfect example of how "free" hurts/slows development.

No. Not theft at all. If you purposely set up a business model where you benefit the more that people have your software, how is that possibly benefiting from theft?!?

Because Linux is free it's development is slow and spuratic, and depends on a few geeks that love it enough to invest their time for free.

I would suggest looking at how much of Linux is actually developed by people earning very good money to develop it.

Then perhaps admitting that you are very, very wrong.

All these socalled "perfectly legitmate business models" are built around the general theft of someone elses product and giving that product away for free while adding some service too it. AKA Ubunto, Redhat, and all the others.

What? You're claiming that Ubuntu, Redhat, IBM and others base their business model on THEFT?!?

Ok. It's difficult to see how you can be taken seriously.

Your crying because I choose not go give up my software to allow someone else to build a business model around my software.

Not crying at all. You are free to make dumb mistakes. We're just trying to explain to you why it's dumb.

Why should I? What is the incentive to me?

Perhaps you're having trouble reading: all of the examples we keep showing are people making MORE money thanks to recognizing the business economics.

If I give my product away, then I basically build my competition, and give them the benefit of my years of hard work. Seems foolish if you ask me.

Only if you have a really bad business model... which it seems you are admitting. Fair enough. If you have a bad business model and don't want to change, then I guess you will have to go through the pain of failure for yourself.

And if I happen to build a product that requires little support, or modifications, then I have effectively given away what could have made a living for me.

Er, apparently you didn't read this post at all. Support or modifications were just ONE of many potential business models.

Linux is a failure in the market, it's measly 5 or 10% of the market place proves that it's a failure, and all the companies built around supporting it make money because 5 or 10% of a billion is still enough for the bottom feeders. Not one of them will ever rival Microsoft in money or power as long as they do not build a product of their own.

Apparently someone's never read anything by Clayton Christensen. You might want to investigate the innovator's dilemma.

Those of us that can develop do, those that can't publish blogs crying about how they should get our work for free.

Yes, that's why we have our own development team, and a business model that doesn't involve selling software, but which is doing quite well for us.

The trick is this: Mozilla covers itself in a kumbaya "FREE!" cover, but you can be sure they are plenty of people over there making coin on the deal. All those contributors and free programmers are just busy making money for someone else. If nothing else, they added probably a similar amount of money to Google's bottom line as a result.

Working for free like this is for suckers, because someone else is making they money off of their sweat. You might enjoy doing it for free, but someone is laughing at you every time you do it.

Re: Re: Re: Cost of Development

All of your claims to fame come back to Linux which is a perfect example of how "free" hurts/slows development.

Disagree. Many, many features incorporated into mainstream system operating systems were first modeled on Linux window managers.

Because Linux is free it's development is slow and spuratic, and depends on a few geeks that love it enough to invest their time for free. Linux has taken 30+ years to get to the same level Windows got to in half or less of the time.

Again, many features you see in modern day operating systems were first implemented on Linux. Have you used Beryl? Windows isn't even 3D optimized. It's 2D optimized at best. Tell me how being pack leader qualifies it as "slow and sporadic" (BTW, you misspelled "spuratic". Using Internet Exploiter?)

All these socalled "perfectly legitmate business models" are built around the general theft of someone elses product and giving that product away for free while adding some service too it. AKA Ubunto, Redhat, and all the others.

Your digging yourself into a hole. I've never heard of Ubunto (but have heard of Ubuntu... misspell much?) I suggest getting yourself a copy and you'll see just how far advanced it is. What I've seen is that many Ubuntu features were conveniently lifted and put into Vista. But whatever.

Without the work of someone else not one of those companies would exist today, and not one of them have the talent or skills that it takes to develop what their business model is built around.

I agree, but with a 180° view. Most creative these days comes from a community, then someone tries to claim it as their own. If big OS manufacturers didn't exist in 1975, FreeBSD and Linux would have taken their place.

The ONLY reason they exist is the generosity of the original developers of Linux.

Linus Torvalds' starting contribution was a paradigm shift- the idea software could be free. Based upon that work, everything else fell into place and many people started contributing.

Your crying because I choose not go give up my software to allow someone else to build a business model around my software. Why should I? What is the incentive to me?

Than that's clearly your choice. One of the things OSS allows is for people who like and enjoy coding the ability to allow them to code. But under your ideal, you are severely limited and have to take on the troubles of managing the business and finding ways to derive wealth from your creation. Each step- taking on an accountant, filing tax returns, litigating when necessary, takes you further and further away from what it is that I *thought* you enjoyed doing. Maybe you are really a business person at heart? Under this, it's quite possible you wouldn't enjoy a 24-hour coding session with redbull and Mountain Dew.

If I maintain ownership, and continue developing I have years of lead over my competitors, and sure they may eventually build something like what I have, but I will be years ahead of them.

No, by nature of managing the business, you start battling multiple fronts and what was once a hobby ceases to be a hobby. When you speak of lead over competitors, I think your fooling yourself. Do you honestly believe that no one has attempted to solve your same problems? Your fooling yourself. In most cases, I have found that problems can be solved easier in the OSS area because code already exists.

If I give my product away, then I basically build my competition, and give them the benefit of my years of hard work. Seems foolish if you ask me.

People solve problems, not computers. The people who actually know and understand computers best are usually the same who play with them in their free time, and usually they contribute to OSS. Your fooling yourself if you think you're the smartest person in the room, and the only person who can solve a problem you have.

And if I happen to build a product that requires little support, or modifications, then I have effectively given away what could have made a living for me.

If you can accomplish that, then you've learned how to write a well coded app. You should seek a larger challenge.

Linux is the common example in the IT world of a successful free product. Yet it took 30+ years to achieve recognition as even a small player in the market.

Sure. That's probably because it was written by actual computer scientists in their off time.

It still falls far behind on many of the advances that windows brings to the market, and is playing constant catchup with new versions of Windows.

Again, it seems you don't understand what existing art Microsoft attempts to replicate.

Linux is a failure in the market, it's measly 5 or 10% of the market place proves that it's a failure...

I think your about to see something amazing. If you put enough number of successful sample cases of MS->OSS transitions in a big population, you would lose that population as a market. This seems to be around 4% according to marketing theory.

and all the companies built around supporting it make money because 5 or 10% of a billion is still enough for the bottom feeders.

Ah, there's the proverbial straw man argument. Bottom feeders.

Those of us that can develop do, those that can't publish blogs crying about how they should get our work for free.

Actually, I could tell you missed the whole point when you used IE, and lacked the ability to spell check your post.

"Because Linux is free it's development is slow and spuratic, and depends on a few geeks that love it enough to invest their time for free. Linux has taken 30+ years to get to the same level Windows got to in half or less of the time."

Windows 1.0 came out in 1985, Linux 0.0.1 came out in 1991. Linux is not even 20 yet and Windows is almost 25. Perhaps your thinking of BSD and AT&T UNIX? They were designed for servers first, and people using them for the desktop is a recent development. Throwing these onto the desktop without time to let it evolve that way is like planting an apple tree and expecting oranges.

The interesting thing about software is...

The interesting thing about software is that it can both be the source of revenue and the advertising of services that generate revenue. Let me give an example. If you have ever used Magento, the PHP-based e-commerce plattform, you would know that the entire system is robust and powerful. It is also highly complex and the core system is free to download and use. But Magento isn't actually their product. Their product is the training and support services behind it. They put a very limited amount of documentation online, just enough to whet your tongue and make you salivate for more. From there you have two choices, spend days or even weeks going through the code and the sporadic at best notes from others that you find on the web, or you can pay them several hundred dollars for the full documentation and tutorial videos from them. Everywhere I have read it seems that these are essential for doing any real customization to the shop. Then they also sell subscription services to download advanced features and modules and get tech support. They make a killing off of these products and services, but those wouldn't exist without the Magento plattform as the selling point.

Now as a web developer I find this issue highly frustrating. That is because this alternative source from support services and training videos is more work on top of all the hours I put into creating the application. So my options are create a new business model that no one has thought of (very difficult) that can make you money off your programming work, sell the services and training, make a compiled application that requires a web-based service to work, or to host the application and sell accounts with monthly fees to use the service like Salesforce.com.

The problem with the latter two options above is that they require you to build a server infrastructure to support these, which requires money. One of the allures of programming is that you just need a computer and your wits to make money, not more money to make money. So that is why I am torn. On one hand I see what Mike is saying and, at least in principle, agree. On the other hand I don't see it as fair that I have to provide extra value and services on top of my hard work writing the code just to make any decent money off of my hard work.

It is like telling an engineer that created a new, highly efficient way to produce power that his work won't make him any money. That he will have to instead go around the world selling blenders and toasters and cars that run on this creation in order to make money. So basically you have to work more to make money on the work you have already done. That is not right and that is not fair.

Re: Re: Stupidity

Contracts that you sign before you install software? I've never signed one. Oh, wait, you mean those long-ass 'you agree to...' statements that they slap in there that you 'implicitly sign by installing' software that you can't return to the store after you've paid for the copy you have? Yeah. Right. This is why I DON'T pay for most software.

Re: Software is not an art

I guess my existence and most of the Linux community's existence proves you wrong. Yes I do work and get paid to develop software that my bosses demand, but in my free time I often times am working on a application that is fun for me or that I end up using often. If I think it is something other people will want then I put it out for them and have received jobs or other recognition based solely on the projects I started for fun.

Which pokes another hole in your theory, by distributing code that I wrote it gets my name out and helps promote me to any prospective employers should I be looking for a job again (or want to take up some contract work on the side).

Linux started as a hobby and mostly stays alive because most people who work for it treat it as a hobby.

Re: Re: Part of the cycle is missing

4. Software UPDATES - scarce supply
Although I agree with most everything said in the origonal post, I would argue this one. How exactly are updates a scarce supply? Can't the same rules be applied to updates when they are released?
Consider, for example, Starcraft, a wildly popular Blizzard game. Updates can be obtained online, for free, not a scarce supply in the least.

Re: Re: Software is not an art

Re:

I may be wasting space given this article is now buried, but oh well.

Your paper tape to database software is for your own use, there isn't demand for it so you better be working for free, no sane company is going to pay you to do it unless they have precious data on paper tape (unlikely).
I'm beginning to see why you have such difficulty with the no cost (aka "free" model) and this statement proves it.

A sane, no wait, three sane companies paid me to write this code. How? Because my expertise in taking an archaic system to a current system was an extremely high selling point.

The companies that hired me were impressed with the talents of doing so, and utilized this to their advantage by hiring me to write/update their existing COBOL code.

Did they get the software? No, of course not. They paid for the experience in writing it.

How many P2P sites or music sharing sites would exist if the owners had to pay to produce all the content they share? Would you pay $100 million for a hollywood movie to give away, or $100,000 so that a record could be made so you can give it away for free? Nope, it would be bad buisness. But stealing it from someone else and running it as part of a ad supported file sharing site? Apparently "FREE!" is great.
Once again, you're mistaking a service vs the product.

The product isn't the music. It's the artist's ability to create the music. You need to understand this. Once you do, you'll realize why P2P software and sites exist.

I notice you continue to dart direct questions to you, but I'm guessing it's because you have no answer that will support your argument.

I see so many people making two mistakes: 1) They assume artists aren't making money from people who freely download and 2) They're confusing the song as the product to which the artist is selling.

Both are incorrect, because 1) The artist has already made the money by the distributor. That's a fact. Licensing fees and royalties guarantee this. 2) the song isn't the product. The artist is the product.

If you develop software, what are you selling? Are you selling your product, or are you selling yourself? It's amazing to see how many people continue to skirt this question, without realizing its purpose.

Not a single person who attacks the no cost model apparently runs a business, because if they had, they'll realize selling software isn't their business.

It's selling themselves. Because the ultimate goal is to get hired to write additional software.

Never once does a company give software a check, now does it? It always gives the programmer the check for the work to create the software.

Re: Re: Re: Part of the cycle is missing

the creation of software updates are a scarce supply. and if you have a service orientated program like steam or Impulse to distribute the updates, they rarely leak onto the net pushing more people to subscribe for them.

if people stop subscribing to updates, then stop creating and find a new program that fulfills a need.

Re: Re:

Direct answers for you:

1) That 3 companies needed the software, well, bravo. Enjoy getting paid. That was my point exactly. You can all it paying for experience, or paying to use your software. The end result is the same, no? That you did it or anyone else did it is not material, there are plenty of people who can do it, you may be able to do it faster because of experience. You are not unique, just rarer in this very particular field

2) The product is the music. I am not paying to rent a musician, I am paying to own a copy of the music so I can listen to it. I am not renting any more of his time, I am paying him for use of his work. P2P "FREE!" sharing of this music would just mean he wouldn't get paid for it, giving his music no value and his skill set none either. Sort of like your program in step 1: if you rented the use of it to one company, and they turned around and gave it to the other two companies for free (cutting your income by 2/3) would you not be upset?

3) Artists don't make money when no money is made. Exactly how much does Piratebay pay out to musicians each year? NOTHING. How much do the P2P traders pay to musicians each year? NOTHING. If there is no income, the distributors aren't paying either. Without revenue, nobody gets paid. The artist is only a product if they do the additional step of doing something that cannot be copied or distributed for free (concerts).

4) You are playing word games on software. "Never once does a company give software a check, now does it?" - without a software product, the programmer gets SFA. They aren't paying you for being smart, they are paying you for a working product. If that same product could be written by an unlimited number of monkeys, the MONKEYS would get the check only because they have the product, not the knowledge. You in a chair as a product is useless unless you are producing something of value other than nice thoughts. So you are PART of the product, but it doesn't remove the value from software, because without the end product, you are just another guy without a job.

Plus, in most cases, the company gives the check to the programmers boss, who in turn pays him a small wage and makes sure the foozball table is in good shape and that the snapple is cold.

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Weird Harold, You seem to be missing the point. Expertise is a very valuable commodity. By hiring an expert a job may take much less time and closer to being correct the first time. These two things alone may make an individual far more marketable (ie likely to get a paying job) than the next guy. What R. Miles was explaining was that his program done on his own time was a demonstration (or advertisement) of his expertise. This advertisement in turn provided him 3 companies willing to pay for his services. You assume he provided them software when this may not have been the case. The task may have been to write documentation or provide training based on his expertise.

Also, if you're not aware most software projects fail to produce a viable product (Check with the Association for Computing Machinery or better yet read the Mythical Man Month) The fun part about this fact is that the people who worked on the failed projects still got paid.

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that's weird.... I have been paid for many months now and only now is the software considered working as far as my customer is concerned. You see I'm being paid to develop a piece of software that they want, as they make changes to the requirements I just continue work to meet them and they pay more because I'm taking longer to code it. once they say the program is done they'll pay me if they want me to make even more changes. Never once are they paying me for the software, they are paying me for the work I am doing for them.

Re: Here is an example

Linux hasn't existed for 30 years. Try early 90's, when Windows already had a toehold in the market. That's less than 2 decades.Actually it just celebrated it's 15th birthday, but you were right, nobody has pointed it out.

And Harold, He's getting paid and is giving away his software for free. How is that not getting paid for giving away something for free?
Is there a flaw in our logic that we missed a step where he sold a product instead of his time spend to develop it?

I think you maybe some day could better shut the fuck up. If you don't want to get it, don't.

Re: Re: Re: Re: Part of the cycle is missing

"Linux hasn't existed for 30 years. Try early 90's, when Windows already had a toehold in the market. That's less than 2 decades.Actually it just celebrated it's 15th birthday, but you were right, nobody has pointed it out."

Re: Re: Re: Cost of Development

In every case where you argue that something should be free you reference "business models" based on the theft of free products.

If this is what you've managed to pull away from the articles, it's painfully obvious that you continue to misread and misrepresent the arguments in the articles.

Linux is a failure in the market, it's measly 5 or 10% of the market place proves that it's a failure, and all the companies built around supporting it make money because 5 or 10% of a billion is still enough for the bottom feeders. Not one of them will ever rival Microsoft in money or power as long as they do not build a product of their own.

And yet, if Linux is the failure you incorrectly assume it to be, then Microsoft's actions concerning the OS would be incredibly foolish. They continue to spread FUD about Linux's patent status without any specifics, helped fund SCO's frivolous lawsuit against IBM as an indirect attack on the OS, and are developing Windows 7 in such a way that it will run on netbooks as a response to the popularity of Linux on the systems.

Based on their actions, Microsoft sees Linux as an increasing threat to their business - hardly something they should have to fear from such a supposed failure. Also, Linux adoption on desktops and notebooks is increasing due to the establishment of user-friendly distributions such as Ubuntu.

makes sense

This concept makes perfect sense. It us understandable how it could be confused though - the difficulty lies in the transition from existing as a finite good and then becoming an infinite one, and not realizing that the two are different things altogether. This distinction is often lost on people in the game development world.